Monro 2025 Q4 Earnings Misses Targets with Net Income Down 675%

Monro (MNRO) reported its fiscal 2025 Q4 earnings on May 28th, 2025. The total revenue of Monro decreased by 4.9% to $294.99 million in 2025 Q4, down from $310.08 million in 2024 Q4. Monro swung to a loss of $0.71 per share in 2025 Q4 from a profit of $0.12 per share in 2024 Q4 (674.3% negative change). Meanwhile, the company reported a net loss of $-21.27 million in 2025 Q4, reflecting a 675.0% deterioration from the net income of $3.70 million achieved in 2024 Q4. Monro’s results were below expectations, with significant challenges highlighted by a sharp decrease in net income. The company did not adjust its guidance, maintaining a cautious stance for fiscal 2026.

Revenue

Earnings/Net Income
Monro swung to a loss of $0.71 per share in 2025 Q4 from a profit of $0.12 per share in 2024 Q4, marking a 674.3% negative change. The net loss was $21.27 million, a 675.0% decline from the net income of $3.70 million in 2024 Q4. The EPS performance signals significant financial challenges.

Post Earnings Price Action Review
The strategy of buying MNRO when revenue beats expectations and holding for 30 days resulted in poor performance. The approach yielded a return of -17.05%, significantly underperforming the benchmark return of 31.23%. The excess return was -48.28%, and the CAGR was -5.06%, indicating substantial losses over the backtested period. The strategy also exhibited a high maximum drawdown of -42.71% and a Sharpe ratio of -0.19, suggesting elevated risk and negative returns. This outcome underscores the difficulties faced by investors employing this strategy, as it fell short in delivering expected gains, highlighting the challenges in predicting market responses post-earnings announcements.

CEO Commentary
Peter Fitzsimmons, President and Chief Executive Officer, emphasized that Monro's business demonstrates durability through cycles, supported by significant scale in a fragmented industry. He noted the strength of fundamentals, including a growing vehicle population and a shift towards professional service as vehicles become more complex. Fitzsimmons identified four strategic priorities: closing unprofitable stores, enhancing customer experience and sales effectiveness, driving profitable customer acquisition, and increasing merchandising productivity. He expressed confidence in executing the improvement plan to enhance profitability and shareholder returns, stating, “I believe the opportunities that we've uncovered... will accelerate the pace of the company's performance improvement.”

Guidance
Monro expects year-over-year comparable store sales growth for fiscal 2026, driven by the improvement plan and potential tariff-related price increases. Preliminary comps for the first quarter are up approximately 7%. While total sales may decline by about $45 million due to store closures, the company anticipates adjusted diluted earnings per share to improve year-over-year. Fiscal 2026 capital expenditures are projected between $25 million and $35 million. The company is not providing overall guidance due to tariff uncertainties but expects to maintain a strong financial position and fund all capital allocations, including dividends.

Additional News
Monro, Inc. announced plans to close 145 underperforming stores during the first quarter of fiscal 2026, aiming to enhance profitability and streamline operations. Additionally, the company declared a cash dividend of $0.28 per share for the first quarter of fiscal 2026, payable on June 17, 2025, to shareholders of record on June 3, 2025. In a strategic move, Monro is focusing on improving customer experience and selling effectiveness, aligning its marketing efforts towards higher-value customer segments. These initiatives reflect Monro's commitment to optimizing its business portfolio and enhancing shareholder value amidst challenging market conditions.